July 26 (Reuters) -Australian shares climbed on Friday after a sharp drop in the previous session, as mining and energy stocks gained, while investors awaited the U.S. central bank's favoured measure of inflation for rate-cut cues.

The S&P/ASX 200 index .AXJO rose 0.7% to 7,911.7 by 0049 GMT after Thursday's 1.3% drop, but was set for its worst week since early June with a drop of 0.7% so far. The Aussie dollar was 0.1% weaker against the U.S. dollar at A$0.65.

Globally, market participants were waiting for the U.S. personal consumption expenditure data, due later in the day, to calibrate their expectations of the timing of rate cuts.

In Australia, miners .AXMM climbed 1.5%, even though iron ore prices were weaker. Mineral Resources MIN.AX gained as much as 6.1% after the diversified miner said it was on track to achieve its production guidance. IRONORE/

Energy stocks .AXEJ rose 1.4% as oil prices were slightly higher on stronger-than-expected U.S. economic data. Oil and gas producers Woodside WDS.AX and Santos STO.AX gained 1.1% and 2%, respectively.

Brent crude LCOc1 futures rose 0.02% to $82.39 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 were flat at $78.28 per barrel. Oil prices settled higher on Thursday after strong U.S. economic data stoked expectations for higher crude demand. O/R

Overnight, the U.S. Dow Jones Industrial Average .DJI rose 0.20%, while the S&P 500 .SPX lost 0.51% and the Nasdaq .IXIC fell 0.93%.

The yield on benchmark 10-year Treasury notes US10YT=RR rose to 4.2407%, compared with its U.S. close of 4.256%.

Australian banks .AXFJ gained 0.5%, with the "Big Four" lenders up between 0.4% and 0.6%.

Bucking the trend, gold stocks .AXGD fell 2.8%, after bullion prices slipped on Thursday to their lowest levels in more than two weeks. GOL/

In New Zealand, the benchmark S&P/NZX 50 index .NZ50 inched 0.1% higher to 21,412.89.

Reporting by Ayushman Ojha in Bengaluru; Editing by Subhranshu Sahu

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